The view from afar

WHEN, in 1990, Mary Robinson became president of Ireland, she gave an inaugural address in which she described herself as a leader of the Irish throughout the world. “Beyond our state, there is a vast community of Irish emigrants,” she said. “I will be proud to represent them.”

More and more countries lose people to migration, as Ireland has done for so long, and therefore have a large diaspora living beyond their borders. They may play a part in their former country's politics, because many emigration countries allow dual citizenship. They may also be an economic force. Although migration is often disruptive and harmful for the sending country, the creation of new, trans-national communities may also bring opportunities for gain.

The losses are obvious. Those who leave are often the best-educated and most enterprising. Remzi Lani, director of Albania's Media Institute, bemoans the brain drain that has stripped his country in the past decade. “All three AIDS experts have gone to Canada,” he says. “The best brains go and don't come back. We have lost one in six of the population—almost one person per family. There are 8,000 Albanians studying in Italian universities—more than in Tirana University. How many will return? Not more than 5%.”

Not only does emigration deplete a country's intellectual capital and energy, it undermines the tax base too. A recent study of the fiscal impact of India's brain drain to America, by Mihir Desai of Harvard University and two colleagues, found that the very best people were most likely to leave. There were 1m Indians living in the United States in 2001, and more than three-quarters of those of working age had a bachelor's degree or better. The earnings in the United States of a group that adds up to 0.1% of India's population are equivalent to an astonishing 10% of India's national income. The net fiscal cost to India of losing these prime taxpayers, say the authors, was 0.24-0.58% of GDP in 2002.

If poor countries had a glut of overeducated, underemployed workers, then the loss of human capital might not matter much. “Most people who leave say that their skills aren't properly used,” says Georgetown's Ms Martin, who argues that such countries might do better to train more people to carry out primary care than to produce expensive doctors. But others argue that seeing highly trained people getting lucrative jobs abroad may persuade youngsters to train too, thus raising a developing country's skill levels.

As rich countries compete for skilled immigrants, development experts worry about the implications. Britain's Department for International Development teamed up with the International Labour Office in Geneva last year to produce a report which found that some developing countries had lost around 30% of their highly educated workforce. However, it argued, international migration generally benefits developing countries, as long as host countries take steps to reduce harm—by, for instance, encouraging migrants to return. And some developing countries are actually keen to have more skilled emigration, argues Allan Findlay of Dundee University, one of the authors of the report. Indeed, India, which produces more highly qualified people than it can employ, is campaigning for migration to be covered by the General Agreement on Trade in Services, part of the current round of international trade talks.

How does migration benefit the sending countries? The most obvious way is through remittances. In Albania, receipts from remittances amount to 75% of its exports of goods and services (with the unwelcome result that its currency is one of Europe's strongest). All told, IMF figures suggest that developing countries receive more than $60 billion a year in remittances. That is $6 billion more than net official aid from OECD countries.

The sheer scale of these flows has prompted interest in the way they are transmitted and deployed. Even such a simple thing as sending money is difficult when an undocumented immigrant cannot open a bank account. Many migrants' families live in countries where the financial system is untrustworthy. Sending them cash became harder after the purge on unofficial channels of money transmission after September 11th.

All this has been a bonanza for the few companies, such as Western Union and Moneygram, that offer reliable money transmission, although at a high cost. It is not unusual for 25% of an immigrant's remittances to be eaten up by fees and poor exchange rates. Now there is a drive in America to start credit unions to do the job more cheaply. And a few banks are competing. For instance, Wells Fargo offers a remittance account in the United States that allows an immigrant's family to draw money from a matching account offered by Bancomer in Mexico. Jane Hennessy, who runs the bank's remittance services, says that Wells Fargo is now piloting a way for immigrants to pay cash into a branch in the United States that can be withdrawn immediately as cash in Mexico. One attraction for undocumented workers is that the bank will accept Mexican identity papers and does not require a passport or American driving licence.

The families that get these remittances often spend them on housing, durable goods and health care. The economy gains if such goods and services are locally produced: on one estimate, each dollar sent home generates three to four dollars of economic growth. Sometimes immigrants from a particular village team up to pay for a septic tank or a school. To channel remittance money into government-approved development projects, some countries try to lure immigrant cash into special bonds. Much of the money flowing back to Central America has gone to rebuild countries shattered by civil war or natural disasters.

Remittances tend to decline over time. But there are other, more subtle ways that emigrants may help the folk back home. For one thing, their departure will change relative wages. If the proportion of skilled people declines, the pay of those who remain may rise. Ioan Mihailescu, rector of Bucharest University and co-author of a UNESCO study on the impact of the brain drain on the academic labour market in south-east Europe, points out that in 1995-97 half his newly graduated physics class left the country, mainly for the United States, whereas last year fewer than 10% of physics graduates went. He thinks this is because jobs for the highly skilled have expanded as the economy has prospered, and pay rates in Romanian companies for people with scientific and technological skills have doubled or trebled over the past eight years.

Don't emigrate, circulate

If immigrants return, they bring back new ideas and skills. A study by Alan Barrett of Dublin's Economic and Social Research Institute looked at returning immigrants to Ireland. It found that male graduates who lived abroad for at least six months after getting their degrees, and who went abroad for work rather than fun, earned 15% more on average than other Irish men with similar qualifications when they came home. Sadly, those who went merely for adventure earned no such premium, and neither did women.

A recent survey by AnnaLee Saxenian for the Public Policy Institute of California of more than 1,500 first-generation Indian and Chinese migrants found that “brain circulation” is a more appropriate way to describe what is happening to these groups in Silicon Valley than “brain drain”. Of those surveyed, 50% go back at least once a year to their home country on business, and 5% return at least five times a year. Even more telling, 74% of Indian respondents and 53% of Chinese ones said they hoped to start a business back home.

Such findings suggest that industrialising countries should try harder to entice back the intellectual and financial capital of their departed migrants. Some already do. Pam Yatsko, author of “New Shanghai: the Rocky Rebirth of China's Legendary City”, reports a succession of job fairs in Silicon Valley, often sponsored by China and aiming to woo back high-tech migrants to start companies in Shanghai's Pudong district. America's technology slump has helped. “People will take the jobs because they know that the cost of living is less in Shanghai, and they can get good domestic help,” she says. “Also, those who stayed in China made oodles of money.”

Even if migrants do not return for good, there are still ways to harness their skills. One that is gathering favour involves using the Internet to create networks of expertise and business contacts. Mercy Brown of South Africa's University of Cape Town has tracked down 41 diaspora networks, tied to 30 different countries (disappointingly few of which are in Africa). Some, such as the South African Network of Skills Abroad, embrace people who are not from South Africa but simply interested in the country's development. Most are strictly for the brainy, and especially those with scientific and technological know-how. All aim to offer a way for expatriates to help with development.

Other immigrants may travel back and forth between sending and host countries, creating trade and business opportunities as they go. Aissa Goumidi in Marseilles is typical. His textile emporium is an Aladdin's cave of glowing brocades, sultry velvets, sequins and lace. Every metre is sold to merchants in his home country of Algeria. Two of his sons work in Algeria, helping to run his bottling plant and hardware factory there. Only his youngest son, still in Marseilles, is a worry: “He would rather learn English than Arabic,” he complains.

In the same city, Mohamed Laqhila, an accountant and second-generation migrant, wants to build on these relationships. He has been bringing people from accounting institutions in the Maghreb countries to discuss investment opportunities in their region with his contemporaries in France. He wants to see a progression, from the first generation that sends back remittances, through the second that sells the family home and brings the cash back to France, to the third that should start to put something more permanent back into the development process.

From all this, a common point emerges. It is in the interests of the sending country to keep in close touch with its émigrés, and to retrieve them if possible. That may not always suit the immigrants or their employers, but it may also be in the interests of host-country governments. Here, surely, is scope for a common policy.

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